SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 23, 2006

(Exact name of registrant as specified in its charter)

STATE OF NEVADA		1-15445		34-1755390
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

312 Farmington Avenue

Farmington, CT 06032-1968

(Address of principal executive offices)

Registrant’s telephone number, including area code: (860) 676-1222

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c)) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01 Regulation FD Disclosure.

As previously disclosed, on June 23, 2006, DrugMax, Inc. held its 2006 Annual General Meeting of Shareholders at the Company’s corporate offices in Farmington, Connecticut, and the audio presentation by Chairman, President & Chief Executive Officer Edgardo A. Mercadante, along with accompanying slides, was made available by web cast simultaneously through a link provided at DrugMax’s web site (www.drugmax.com). A transcript of the presentation and the slides used during the presentation are archived at www.drugmax.com and will be available for viewing and listening for the next 90 days. Copies also are attached hereto as Exhibits 99.1 and 99.2.

The information in this Form 8-K and the Exhibits attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities under that section and shall not be deemed to be incorporated by reference into filings under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

99.1		Transcript of June 23, 2006, Web Cast
99.2		Slideshow Presentation

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.


	DRUGMAX, INC.

	By:	/s/ Edgardo A. Mercadante
		Edgardo A. Mercadante, President, Chief Executive Officer and Chairman of the Board

Dated: June 28, 2006

Exhibit Number		Exhibit Description

99.1		Transcript of June 23, 2006, Web Cast
99.2		Slideshow Presentation

Final Transcript

Conference Call Transcript

DMAX - Drugmax Inc Shareholders Meeting

Event Date/Time: Jun. 23. 2006 / 10:00AM ET

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Final Transcript

Jun. 23. 2006 / 10:00AM ET, DMAX - Drugmax Inc Shareholders Meeting

CORPORATE PARTICIPANTS

Ed Mercadante

DrugMax Inc. - Chairman, President, CEO

Ed Mercadante - DrugMax Inc. - Chairman, President, CEO

Good morning ladies and gentlemen. My name is Ed Mercadante, I'm Chairman of the Board and Chief Executive Officer of DrugMax. On behalf of the Board of Directors and management, I'm pleased to welcome you to this year's annual shareholders meeting and hereby call the meeting to order.

At this time, I'd like to provide you with a brief overview of the Company's recent activities and initiate our web cast.

Good to morning everyone on the web cast. I'm Ed Mercadante, Chairman of the Board and President and Chief Executive Officer of DrugMax. Thank you for joining us this morning. Before I begin the presentation, I'd like to draw your attention to the cautionary statement concerning forward looking statements. Please take a moment to read. This and the entire presentation will be archived and available on our web site.

I'd like to start off by telling you a little bit about DrugMax today. First of all, we are the first integrated specialty pharmaceutical distribution model in the United States. We have a targeted location strategy of operating pharmacies at or near the point of care and focusing on specialty products. Our outpatient pharmacies at the point of care are in or near medical centers and they treat chronically ill high-value patients with acute prescription medication services. We service physicians and clinics for in-office and outpatient treatment. We are nationally recognized throughout our Familymeds brand and we operate 78 locations, seven licensed franchise locations, and we have presence in 14 states.

Our vision is to build the largest network of on-site clinic-operated pharmacies in the United States under the Familymeds brand. Our value proposition is focused on specialty pharmacy services for the chronic acute care patients and their physician providers. One of the most important parts of our company is our depth of experience. On this slide, you will see the management team that we have assembled which I'm very proud of and the years of experience they have in various sectors of both the industry and the financial sector that will help us move our company in the right direction in the future.

Just to highlight, Jim Bologa, who has just joined our company as our new CFO -- Jim, would you stand up? Jim Searson, who is also a Board member and now has moved from CFO to Chief Operating Officer -- Jim. Allison Kiena, who is our General Counsel. Jim Beaumariage, who is our Senior Vice President of Pharmacy Operations and the other two gentlemen are not with us today -- Greg and Rees.

To talk about DrugMax and Familymeds, we have to highlight our unique business model and the approach we have to the industry. I'd like to highlight it by starting off with this chart. On the left side, you will see that our targeted location strategy and the base of our business is centered around our Familymeds Clinic Pharmacies and Arrow Apothecary Pharmacies. These pharmacies are located largely in hospitals and clinics and nearby to medical campuses. We have 83 of those locations between our company-run locations and our franchise locations.

In addition, we operate Worksite employer-sponsored pharmacies for Fortune 500 companies with large single site of many employees that can support a pharmacy. And finally, we have a channel of distribution called Valley Medical Supply where we supply to small and mid-sized medical groups and health-care providers pharmaceuticals. We focus on one core product strength, which is oral and specialty pharmaceutical, home care and medical care specialty products. We think that our strength is being focused on this sector in trying to drive the business to an integrated approach of having three channels of sales revenues. Our target customers for Familymeds are the chronically ill patients with acute needs. Our target customer for Worksite Pharmacy operations are large employee and retiree populations and our target customer for our Valley Medical Supply business are our physicians, clinics and other specialty health-care providers.

The strength of our business model is based in the value proposition of our location strategy. To highlight it, we have an increased -- there is an increased focus from health-care insurance companies and employers to reduce health-care costs in this country. There's a growing consumer preference towards point of care prescription services and we must provide those in a low-cost, convenient environment. So how we do that is by employing our unique location strategy which targets these large employer campuses, the hospital clinics and medical campuses, and medical and health-care provider locations.

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Final Transcript

Jun. 23. 2006 / 10:00AM ET, DMAX - Drugmax Inc Shareholders Meeting

What we focus on is specialty pharmaceuticals, the drug category that has driven much of the pharmaceutical expansion in the year 2000 and beyond. It's a market of 20 to $25 billion and this slide tells you a little bit of a definition of what the products constitute. They're biopharmaceuticals, blood-derived products, complex molecules, and select oral, injectable and infused medication. The uniqueness of the specialty pharmaceutical category is that it requires tailored patient education, it requires specific dosing, it requires special forms of administration and monitoring needs and it usually requires some form of special handling.

This slide will give you a quick overview of the competitive pharmacy environment for our type of pharmacies versus the industry. If you look at the left-hand side of the axis, you will see the chain pharmacies on average do about $4.3 million in revenue. They have -- about 68% of their sales come from pharmacy. The overall selling space for an average 10 operation is about 9000 square feet, and some of those are much larger than that, and the average generic penetration is 52%. Independents -- much lower in top line volume, 2.2 million, 95% of their sales derived from pharmacy sales and their average selling space is about 3000 feet. And they average about 48% penetration into the generic market. We'll come back to generics because we think it's a very important factor in our business model.

Comparative, our pharmacies are about 1800 square feet. We do about $2.9 million on average per pharmacy, 95% of it is prescription medication and 57% generic pull-through is where we were and where we are right now. And our average prescription price right now is approximately $60.

This slide will give you a quick breakdown of our core business by therapeutic category, and you can see that, traditionally, our business was centered and focused on our cardiovascular market. I will tell you, however, the mental health component of our business, the pain oncology component, the endocrine and infectious disease are the growth markets for us right now and the growth arenas for therapeutic categories; pain management, in particular with oncology.

This slide depicts our patient demographic age group. More than 60% of our entire business is centered around patients who are 50 years old and greater. And you can see with the Medicare D program that was initiated at the beginning of this year that the percentage will continue to increase and these are the high-value, unique patients that we're going after.

Let's talk a little bit about the market dynamics of the industry. Today, Medicare Modernization Act went into effect January of this year, in 2006, and the Medicare Part D program for the first time covered patients who were uncovered, indigent, elderly patients who are covered now by Medicare, as well as some dual-eligible beneficiaries. There has been an expansion of the prescription drug benefit for those seniors and the reimbursement rate to us has been highly variable, depending on which agency is administering the Medicare Part D program. We believe that generics will play a very, very important role in the future in this area of Medicare D.

In addition, one of the key dynamics that are changing in the industry is the fluctuating supply and demand of both human resources and the demand for pharmaceuticals and prescription drugs. This slide will go over -- prescriptions are expected to grow by 41%, from 3.2 billion prescriptions dispensed in 2003 to 4.5 billion dispensed in 2010. At the same time, the need for community pharmacists will increase by 9.2%. And also, there will be an increased requirement for disease management services called medication therapeutic management under the new Med D program. These are very important dynamics that lend themselves perfectly to growing our business model in this environment.

The characterization of our strength is put together in these four quadrants -- our pharmacies, our patients, our relationships and our expertise. I'd like to take a couple of minutes and just review for you what our strengths are at each one of these core categories. First of all, our pharmacies. 80 pharmacies in key medical locations, filling 3.6 million prescriptions annually and an estimated market in those locations generating $1.3 billion. So we think we have a lot of room for growth in organic sales in the business that we already have present today. Tremendous opportunity. It's indicative of where we have located our pharmacies, are at the position where they can service patients and they're in environments where there's a lot of physicians. So essentially, we are servicing those sick patients who return to their doctors very frequently for medication therapy.

The type of patients we service -- we have over 400,000 chronic and acute patients registered in our pharmacies. Over 300,000 patients got prescriptions last year. Our active program is designed around our patients have got greater medication compliance. We were one of the first companies to really foster medication compliance and adherence in the United States. We think that the opportunity to leverage that into the new Med D program medication therapeutic management is a plus and our focus now is on greater specialty drug pull-through, which are those high-cost biopharmaceutical and injectable drugs we discussed a few minutes ago.

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Final Transcript

Jun. 23. 2006 / 10:00AM ET, DMAX - Drugmax Inc Shareholders Meeting

Our relationships are the strength and backbone of the company. Our pharmacies at the point of care, we have over 4000 doctors in our medical office buildings, we have very strong relationships with those physicians. We have a sales force that calls on the physician on a constant basis and reinforces our position with those doctors and those medical centers.

In addition, our Valley Medical Supply business will grow off of those relationships with those doctors because we believe we can sell product into those doctors that we already have a relationship with. Our expertise -- we are pharmacy focused. The only thing we do is pharmacy. Specialty complex treatments are our forte. Things where we can focus on a higher transactional value; for example infectious disease, diabetes, pain and oncology and some of those therapeutic categories that I described to you a few minutes earlier.

So in summary, we believe that we can leverage our platform's strength for success in the future. Now what are some of our strategic initiatives going forward? This slide summarizes our strategic initiatives. First is to build our per-unit sales volume on each economic pharmacy we operate. We're going to do that largely by three direct methods -- growing organic sales by location by knocking on the door of the doctors and getting referrals from those physicians and providing the best possible customer service and patient services to our patients. Secondly, through a deeper assortment of products with a higher transactional value; and third, by focusing on these core categories known as specialty pharmaceuticals and institutional pharmacy products and services. We think that is how we're going to build our unit volume sales.

Second, we're focused on an integrated growth. That is to say that our pharmacies are connected directly to our other business known as Valley Medical Supply where we are directly calling on physicians, health-care providers and building off of the Familymeds trade name and brand loyalty to establish a presence in those doctors' offices. The pro forma estimate of this business this year will be over $15 million in 2006.

Third, we intend to add more Worksite Pharmacies as I discussed a few minutes ago. There is a growing demand by employers to control cost and there's a growing demand by large employers to improve convenience for their employees. We think that those two factors can be both served up well by having Worksite Pharmacy presence in large employers.

Fourth, we think that we can run a better operation more profitably and focus strategically through the use of automation and technology. We have fostered and are now pioneering a kiosk program, connecting patients to pharmacies, and also fostering and promoting electronic transmission of prescriptions connecting the Familymeds operations directly to our physicians. In addition, we have rolled out and we are continuing the implementation of an enhancement to our pharmacy and our data warehousing capabilities throughout our entire chain so that we can operate more efficiently in the future.

And finally, we believe that we have to grow our network of pharmacies. It's a fragmented market in our area. We think that there are over 1000 location opportunities in medical centers or nearby to medical locations that we can foster our growth in.

Let's talk a little bit about what we did in 2005. 2005 as you know was a difficult year for this company. It was the first year after the reverse merger where Familymeds reversed into DrugMax. Once we got past some of those issues, we had some very positive developments. First, we divested ourselves of our non-core lower-margin legacy wholesale businesses in December. We integrated the DrugMax distribution facility with our pharmacy operations and it's now Valley Medical Supply. We completed the refinancing and recapitalization to improve our financial position in October of '05.

But, rather than focus on the past, I would really like to talk about our objectives for the future. 2006 will be marked by improved financial performance and operational integration and leveraging our growth. The three items that we're really focusing on is, first, growing our topline organic sales. We intend to do that by upselling pharmaceuticals to physicians in our current pharmacy location through our VMS division. In addition, supercharging our sales referrals from physicians in Specialty Rx and through the institutional factors like assisted living and group homes. I'm happy to say that we're -- both of these categories for organic growth are well on their way and in the next slide, we'll show some of the traction we have on that.

We also intend to add some new pharmacies. We're going to stick to our environment of operating pharmacies at medical institutions and employers, we're not going to get out of bounds, we're going to stay to our focus, we're going to grow pharmacies located in those environments through both greenfield and select acquisitions on an opportunistic basis.

And finally, one of the key objectives for 2006 is to expand our gross margin back to where we were in 2004 as a private company of 20.5%. This gross margin bogey is we believe a healthy gross margin in the environment that we are in right now in the managed care environment and the prevailing downward pressure on reimbursement. We're going to do that through three key methodologies. One, through the use of a Familymeds formulary emphasizing generic utilization. That is, substituting generics at key moments in the prescription delivery and dispensing process and maximizing our generic gross margin return through that formulary. Second, through a product set strategy geared towards the high-value patient with chronic diseases. There are patients that obtain many, many prescriptions and often have higher -- if you look at the patient on a market basket basis, you will get a higher return on gross margin if you treat that patient overall -- not just with oral meds, not just with injectable meds, not just with a certain category or therapeutic, but the overall patient that has an acute high-demand type of need.

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Final Transcript

Jun. 23. 2006 / 10:00AM ET, DMAX - Drugmax Inc Shareholders Meeting

And finally, by using a supply chain that delivers pharmaceuticals to our stores on a five-day week. We think this was a considerable problem for us last year where we were having two-day a week delivery to our stores and it led to many out of stocks and other problems. We're back to doing a five-day a week wholesaler base supply program, supply chain program and we think that that will enhance our gross margin in the long run.

Next, I think we want to focus on profitability. This company has to get to profitability, and to get to profitability, we're going to focus on that through increasing our gross margin that I just described, by bundling products. Pharmaceuticals, for example, those high-value patients that get pharmaceuticals, they also are a very good market to sell other products to -- for example, home care products that have over a 30% gross margin. By utilization of generics as I mentioned, they yield higher gross margins, over 50%. And I expect in 2006 through 2007, there will be a dramatic shift toward generics.

And finally through compounded and infused medications. Those drugs that are compounded and those drugs that are infused yield a higher gross margin, over 50%. So our focus will be on those types of products. We have to stay vigilant on expense control. We cannot reach profitability unless we're vigilant on the expense control. The entire proposition is being built on being vigilant on that. I've asked the team, between Jim Bologa my CFO and Jim Searson my COO, to be focused acutely on controlling expenses in our business, maintaining our SG&A model at the current pharmacy footprint. That's very important because if we stay at about 1800 square feet, we won't add extra variable cost to our business.

Second is our proximity and leverage towards the physician. If we stay close to the medical supply chain, we will get more business through referral and have to use less marketing dollars to get that business. It's very, very important; two premises to controlling our expenses.

This slide will give you a quick review on a month-by-month basis of our sales traction thus far this year, which I am encouraged by. We have a lot of work in front of us, but I am very encouraged by the results thus far. Starting out in January, our average per-week sales were $4.1 million and you can see by the line that we progressed to 4.4 million a week on average in February to 4.5 million a week on average in March to 4.6 million to May where we are at $4.8 million per week in May. Very important to note is that we are on a retail fiscal calendar. That is to say, it's a 4-4-5 calendar. The first two months of the quarter are four-week months and the third month is a five-week month. In total, 13 weeks to the quarter. That is really important.

So April and May, our sales were at $37.5 million and they grew by 10% year-over-year -- a very positive same-store and same comp, both. We hope to continue this momentum going into the summer, which typically is from a seasonal point of view, one of our slower periods of time, and re-propel ourselves into the late third quarter and fourth quarter.

Quick understanding -- we've reviewed these financials already with the investment community and with our shareholders. But in Q1 of 2006, our revenues were 56 million, and we increased by 6.9% from the previous quarter, our fourth quarter. Our gross margin came back to 19.5 from 18.3. Our operating loss was narrowed and improved by 36% compared to our operating loss in Q4 of '05 and our net loss per share of $0.06 compared to our net loss per share of $0.47 in Q4 of 2005.

We think we have to continue to march towards profitability. We're going to do that through focusing on all of those described initiatives that I have already gone through. This slide just gives you a quick idea of where we stand right now.

So what are the key takeaways? Key takeaways are, we have a unique proposition in terms of where our locations are and we are focusing on specialty products foremost to get us to profitability in the growth of sales. We have a forward focus on pharmacy and pharmacy alone. That's our business. We intend to leverage that business into a platform strength on the Valley Medical Supply side of the business. We think we have favorable competitive metrics in light of a changing and a dynamic market, especially with the introduction of Medicare D, and we think we have an improving financial condition. We think we have a lot to get to, but we are moving in the right direction and we believe we are very well positioned for substantial organic revenue growth in 2006. We expect to be EBITDA positive in the second half of this year throughout the second half of this year for 2006.

This concludes the web cast portion of our presentation. At this point, we will rejoin our normal annual meeting agenda. Thank you very much for those who have been on the web cast.

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Final Transcript

Jun. 23. 2006 / 10:00AM ET, DMAX - Drugmax Inc Shareholders Meeting

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Welcome to the
Annual General
Meeting of
Shareholders

June 23, 2006

Forward Looking Statements

Certain oral statements made by management of DrugMax, Inc. from time to time, including those contained in this presentation and
the oral presentation that accompanies it, that are not historical facts are “forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Because such statements involve risks and uncertainties, actual results may differ materially
from those expressed or implied by such forward-looking statements. Forward-looking statements, are statements regarding the intent,
belief or current expectations, estimates or projections of DrugMax, its directors or its officers about DrugMax and the industry in
which it operates, and include among other items, statements regarding (a) DrugMax’s strategies regarding growth and business
expansion, including its strategy of building an integrated specialty drug distribution platform with multiple sales channels, opening
new Worksite locations and acquiring third-party pharmacies, (b) its financing plans, (c) trends affecting its financial condition or
results of operations; and (d) its ability to continue to control costs and to meet its liquidity and other financing needs. Although
DrugMax believes that its expectations are based on reasonable assumptions, it can give no assurance that the anticipated results will
occur. When used in this report, the words “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” and similar
expressions are generally intended to identify forward-looking statements.

Important factors that could cause the actual results to differ materially from those in the forward-looking statements include, among
other items, (i) management’s ability to implement its growth and business strategies, (ii) management’s ability to locate and acquire
suitable acquisition candidates; (iii) management’s ability to negotiate and open new Worksite pharmacies, (iv) management’s ability to
manage the company’s growth, (v) changes in the regulatory and general economic environment related to the health care and
pharmaceutical industries, including possible changes in reimbursement for healthcare products and in manufacturers’ pricing or
distribution policies; (vi) conditions in the capital markets, including the interest rate environment and the availability of capital; (vii)
changes in the competitive marketplace that could affect DrugMax’s revenue and/or cost bases, such as increased competition, lack of
qualified marketing, management or other personnel, and increased labor and inventory costs; and (viii) changes regarding the
availability and pricing of the products which DrugMax distributes, as well as the loss of one or more key suppliers for which
alternative sources may not be available. Further information relating to factors that could cause actual results to differ from those
anticipated is included under the heading Risk Factors in DrugMax’s Form 10-K for the year ended December 31, 2005 filed with the
U.S. Securities and Exchange Commission. DrugMax disclaims any intention or obligation to update or revise forward-looking
statements, whether as a result of new information, future events or otherwise.

DrugMax Today

First integrated specialty pharmaceutical distribution
model:

Targeted location strategy

Specialty product focus

Outpatient pharmacies at point of care:

In or near medical centers

For chronically ill, high value patients with acute prescription
medications

Servicing physicians and clinics for in-office treatment

Nationally recognized brand: Familymeds

78 corporate locations

7 licensed/franchised locations

Presence in 14 states

DrugMax Today & Familymeds Tomorrow

Vision

Build the largest network of on-site & clinic pharmacies in
the U.S. under the Familymeds brand

Value

Focused specialty pharmacy services for chronic/acute
patients and their physician providers

Depth of Experience

Years of

Previous Experience /

Name

Title

Experience

Affiliations

Ed Mercadante
Pharmacist

Chairman and Chief Executive Officer

Familymeds, Arrow Corporation, APP, Rite Aid,

GNC, Medibank, ProHealth

Jim Bologa, CPA

Chief Operating Officer

Ernst & Young

Jim Beaumariage
Pharmacist

SVP, Pharmacy Operations,

Familymeds, CVS, CVS/People’s Drug

Allison Kiene
Pharmacist - Lawyer

VP, General Counsel and Secretary

Familymeds, The Stop & Shop Supermarket

Company, Stop & Shop Pharmacy

Rees Pinney

SVP, Employer Sponsored Pharmacy,

Familymeds, Healthright, O'Neal & Prelle

Gregg Montgomery
Pharmacist

SVP, Procurement,

Familymeds, Rite-Aid, Farmco Ventures,

NeighborCare

Familymeds, Inc.

Valley Drug Co.

Jim Searson, CPA

Chief Financial Officer

Daticon, TranSwitch, Katerra, PWC

Chronically Ill

Patients With

Acute Needs

Large Employee

and

Retiree Population

Physicians, Clinics

and Other

Specialty Providers

FamilyMeds Clinic

and

Arrow Apothecary

Pharmacies

Worksite

Employer

Sponsored

Pharmacies

Valley

Medical Supply

Hospital Clinics

and

Medical Campuses

(83 locations)

Fortune 500

Companies with

Large Single Site

Population of

Employees

(2 locations)

Small to Mid-size

Medical and

Healthcare

Provider Locations

Oral & Specialty Pharmaceuticals

HomeCare & Medical Care Specialty Products

Target

Customer

Product
Focus

Targeted
Location

Strategy

Unique Business Model

Focus: Location Strategy

Increased focus from health insurers and employers to
reduce healthcare costs

Growing consumer preference toward point of care
prescription service

To provide a low-cost solution with a focus on convenience, DrugMax
employs a unique location strategy which targets:

Large employer campuses

Hospital clinics and medical campuses

Medical & healthcare provider locations

Focus: Specialty Pharmaceuticals

Specialty Pharmaceuticals
Include:

Biopharmaceuticals

Blood Derived Products

Complex Molecules

Select oral, injectable and
infused medications

Specialty Pharmaceuticals
Require:

Tailored patient education for
safe & cost-effective use

Patient specific dosing

Patient monitoring with acute
needs

Administration via injection,
infusion, inhalation or oral

Usually requires special handling

Drug category driven by advances in drug research &
technology since 2000

Target and treat specific chronic or genetic conditions

Estimated $20-$25B market opportunity

Competitive Pharmacy Metrics

Source: NACDS industry profile 2005

Mass Market

Supermarkets

Our Pharmacies

Independents

Chain

Average Rx Price for

Overall Industry

Overall Selling

Space/Unit (sq. ft.)

Average Sales/

Pharmacy

% of Pharmacy Sales

Average Generic

Utilization

9,062

$4.3 Million

68%

52%

3,087

$2.2 Million

95%

48%

43,814

$2.7 Million

13%

N/A

1,800

$2.9 Million

95%

57%

$54.60

$59.87

Core Business by Therapeutic Category

Percentage of RX Revenue

Patient Demographics by Age Group

Percentage of RX Utilization

Market Dynamics

Medicare Modernization Act - Medicare Part D

Expansion of prescription drug benefit for seniors

Highly variable reimbursement structure for pharmacies

Generics will play a more important role in the future

Fluctuating supply and demand

Prescriptions growth outpacing supply of community pharmacists

Prescriptions +41%: 3.2 B in 2003 to 4.5 B in 2010

Community pharmacists +9.2%

Requirements for disease management services called Medication
Therapeutic Management under new Med D Program

Leveraging Our Platform Strength

Our Expertise

Specialty & complex treatments

Higher transaction value

Infectious disease

Diabetes

Pain & Oncology

Respiratory

Psychological & mental health

Our Relationships

43 pharmacies at point of care

Inside medical office
buildings/campuses

4,000 doctors on medical
campuses within or near our sites

Valley Medical Supply

Natural outlet for medical
specialty distribution

Our Patients

> 400,000 chronic and acute
patients

Active patient and clinical
programs:

Greater medication compliance

Medical therapeutic
management (MTM)

Greater specialty drug

pull-through

Our Pharmacies

80 pharmacies in key medical
locations

>3.6M prescriptions

Estimated market opportunity:

$1.3B in pharmacy & medical
supply sales in our existing
locations

Strategic Initiatives

Build our per unit sales volume

Organic sales growth by location

Deeper product assortment with higher transactional value

Specialty pharmacy and Institutional Rx products & Services

Focus on integrated growth

Direct sales of products and services to doctors

Pro forma estimate $15 million in 2006

Add more Worksite Pharmacies^SM

Growing demand by employers to control drug benefit expenditures

Improve employee convenience

Increase automation and technological capabilities

Kiosks connecting patients to pharmacies

Electronic Rx transmission connecting DrugMax to physicians

Grow our network of pharmacies

Fragmented market = > 1,000 location opportunities

2005 Scorecard

Divested “non core” lower margin legacy wholesale
distribution business (December 2005)

Integrated DrugMax distribution facility with pharmacy
operations (December 2005)

Completed refinancing and recapitalization to improve our
financial position (October 2005)

2006 Objectives

Top-line organic growth

Up-sell pharmaceuticals to physicians in current pharmacy locations and
through Valley Medical Supply (VMS)

Super-charge sales referrals from physicians in specialty Rx and through
institutional sectors like assisted living & group homes for Rx sales

Add new pharmacies

Near leading medical institutions and hospitals and large employer
sponsored locations

Expand gross margin to the 20.5% level seen in 2004

Through “Familymeds Formulary” emphasizing Generic Utilization

Through Product strategy geared toward high value patients with chronic
diseases

Through using 5 day a week Wholesaler Base Supply Chain Management

Improve financial performance through
operational integration & leveraged growth:

Focus on Profitability

Increase Gross Margin

Bundle products

Pharmaceuticals with home care products yield higher gross margins of
30+%

Utilization of generic drugs yields higher gross margins of
approximately 50% (2006-2007 will see dramatic shift towards
generics)

Compounded and infusion medications yield higher gross margins of
50+%

Expense Control

Maintain SG&A model of current pharmacy footprint and operation
help control expense

Average size is 1800 sq. ft. with low occupancy expenses

Location/proximity strategy

Being close to physicians drives down operating/marketing expenses

2006 Monthly Sales Trend

$16.2M

$17.4M

$22.5M

$18.4M

$19.0M

April & May 2006 sales of $37.4M grew 10.0% YoY and
11.6% over Jan & Feb 2006 sales.

(4 weeks)

(5 weeks)

~ 4.1M/wk

~ 4.4M/wk

~ 4.5M/wk

~ 4.6M/wk

~ 4.8M/wk

Q1 2006 Financial Highlights

Revenues of $56M, a sequential increase of 6.9%

Gross margin of 19.5%, compared to 18.3% in Q4 2005

Operating loss of $2.9M, an improvement of 36%
compared to loss of $4.5M in Q4 2005

Net loss per share of $.06, compared to net loss of $.47 in
Q4 2005

Nasdaq: DMAX (FMRX)

Shares Outstanding: approximately 66 million

Market Capitalization: $47 million

Fiscal Year End: Saturday closest to December 31

We operate on a 4-4-5 week retail quarterly calendar

As of June 15, 2006

Key Takeaways

Unique locations + specialty products model

Forward focus on core pharmacy operations

Leverage through integrated platform strength

Favorable competitive metrics and market dynamics

Improving financial condition

Positioned to achieve substantial organic revenue growth
in 2006

Expect to be EBITDA positive in 2H 2006

FAMILYMEDS, INC.
NASDAQ: FMRX
(DrugMax, Inc. Nasdaq: DMAX)

312 Farmington Avenue
Farmington, CT 06032-1968
Tel: 860-676-1222

www.drugmax.com
www.familymeds.com

Pharmacy Services for Specialty Care